The main concern for any investor, especially risk-averse investors, is whether their investment will generate inflation-beating returns. Inflation in India is currently 7%. Therefore, one must plan their investments keeping the inflation rate in mind to be able to balance expenses and returns. Here are some banks offering FD interest rates which are above the current inflation rate. Note that the rates below are for amounts less than Rs 2 crore.
Banks offering more than 7% for a tenure of 3 years
| Name of bank | 3 year |
| DCB Bank | 7.60 |
| Bandhan Bank | 7.50 |
| indusind bank | 7.50 |
| AU Small Finance Bank | 7.40 |
Banks offering more than 7% on FD of 5 years
| Name of bank | 5 year |
| DCB Bank | 7.50 |
| indusind bank | 7.50 |
| AU Small Finance Bank | 7.40 |
| RBL Bank | 7.05 |
Banks give higher interest to senior citizens
According to SBI’s website, “The rate applicable to all senior citizens and SBI pensioners aged 60 years and above shall be 0.50% higher than the rate payable for all tenures to resident Indian senior citizens, i.e. SBI resident Indian senior citizen pensioners Both the benefits of staff (1%) and resident Indian senior citizens (0.50%) will be available.”
According to the website, “Additional interest rate of 50 bps on card rates applicable to senior citizens of 60 years and up to 80 years for tenures up to 5 years and 80 bps on domestic deposits for tenures above 5 years will get. 2 crores less than Rs. In case of staff members as well as retired staff members, who are also senior citizens, the maximum interest rate on the applicable card rate will be 150 bps for tenures up to 5 years and 180 bps for tenures exceeding 5 years.
“In addition, super senior citizens above the age of 80 years will get an additional interest rate of 80 bps over the applicable card rate across all maturity buckets. In case of staff members as well as retired staff members who are also super senior citizens, the maximum interest rate on the applicable card rate shall be 180 bps higher than the applicable card rate across all maturity buckets,” according to the website.
tax on FD
Senior citizens are exempted from paying tax on fixed deposits up to Rs. 50,000 annually. That means up to Rs. 50,000 in FD interest received in a financial year is not subject to taxation for senior citizens.